Hesse is leaving the telecommunications giant to head up Seattle-based communications start-up TeraBeam Networks, which builds technology that sends data by laser beam. Hesse will be president and chief executive of TeraBeam.
The former AT&T executive's departure comes just before the company is expected to launch a major public offering of its wireless division, in what is expected to be the largest IPO in U.S. history--possibly raising upward of $10 billion.
AT&T has named Mohan Gyani to replace Hesse. Gyani joined AT&T's wireless unit last month as its chief financial officer.
Hesse joined AT&T in 1991 and was appointed as president and CEO of the wireless division in 1997.
His departure had been rumored ever since he was passed over for the top job at AT&T's wireless group late last year, according to Reuters. In December, AT&T named president John Zeglis to head the wireless divison.